The sphere of cryptocurrencies has been developing very fast during the last few years. The world is informed from time to time about yet another new project. One of the more interesting projects is Worldcoin. More precisely, this is one aimed at trying to put together digital identity and digital currency in the framework of its work on creating a global financial network.
But what is Worldcoin, and how does that work? I learnt quite a bit about this in the recent escape room near me at Breakout Bangalore. So in this post, we are going to break down Worldcoin in simple terms: what it is, how it works, and why that matters.
What Is Worldcoin?
Worldcoin is, again, another cryptocurrency. It’s very different from Bitcoin and Ethereum, or most forms of cryptocurrency in that respect. So, the vision that Worldcoin fosters is that of an inclusive world economy where every individual has a say.
Perhaps the overarching concept behind Worldcoin is that anyone anywhere in the world can have cryptocurrency. It holds true even if they happen not to have a bank account, or even if they live in a country with mostly ineffective financial infrastructure. Probably one of the most globally distributed cryptocurrencies, the concept of Worldcoin will be to support those ignored by traditional banking.
How does Worldcoin work?
Two of the most important elements that will be discussed with regards to this are the following:
- Worldcoin Token (WLD)-this is the very cryptocurrency that people would use. WLD just happens to be a digital currency, just like Bitcoin or Ethereum. People can use it for transactions, savings, or even investments.
- World ID: It is a system in which people are being allocated a unique digital identity. It also connects that digital identity with the ability to make use of and earn Worldcoin. In other words, the concept here is that every human gets a chance to sign up in the Worldcoin once to keep things fair regarding the distribution and also to reduce fraud.
Here is how Worldcoin works:
Step 1: Verification
To this effect, Worldcoin requires people to identify and subscribe to the network. For this it uses a special device called the Orb. As the name hints, it is a small, round-shaped device that scans the iris of the user to generate a code called the World ID.
It uses iris scans because the iris of every individual is different. This, therefore, makes it a secure means of identification. Once they have their World ID, then they can access Worldcoin.
Step 2: Get Worldcoin
The Orb will credit the user with a small portion of WLD once identity is confirmed. That would go in line with the whole project of fairly distributing its currency around the world. The better it is, the more users join them, and the longer Worldcoin will be used.
Step 3: Use Worldcoin
And once people have Worldcoin, it works just like any other cryptocurrency. Users could transfer the currency to other people, use it to pay for goods or services, or retain it.
Worldcoin works on blockchain technology just like Bitcoin. Thus, everything is secure, transparent, and even decentralized-no single organization or government controls it.
The Importance of Worldcoin
This has been reiterated by the founders heading Worldcoin: “Digital currency should be at every finger’s tips and not depend on one’s financial situation.” Here are some of the reasons why Worldcoin matters:
- Financial Inclusion: As it is, billions of people cannot afford or access traditional banking services. It gives them a digital means of storing and using money where bank accounts are not present.
- Global Distribution: Most of the other cryptocurrencies are barely available to any common man. Worldcoin wants to be globally disseminated right from the very beginning. The usage of the Orb and World ID make sure that this currency is going to be distributed in such a way that it will be fair and each person gets it once.
- Digital Identity: Besides financial, another important role it will play is that of digital identity. In today’s digitized world, people will find it rather necessary to have a unique and secure identity to participate in almost all varieties of online services. They use Worldcoin’s World ID to verify their identities in a secure way, without the need to carry older forms of identification with them, like a passport or driver’s license.
- Decentralized: The main principle of Worldcoin, just like many other cryptos, is a decentralized blockchain. That means there is no single host responsible for the network but rather distributed among users all over the world.
- Privacy and Security: Some might be concerned about the private concerns an iris would go through to create a World ID. In that regard, though, Worldcoin does ensure that no image of the iris actually gets stored. It gets reduced to a code that cannot be reversed. It’s a scan that cannot be changed back into its old form for protection of people’s privacy, yet its security on the system remains intact.
Worldcoin: Challenges and Criticisms
Running parallel to its high ambition, a set of challenges and criticisms also involved Worldcoin. Some major points of concern include: –
Privacy Concerns: Still anxious about personal data leakage, with biometric data such as iris scans, precautions are taken by Worldcoin so as not to leak the personal information of their customers. This has made people worried since, in case such information fell into the wrong hands, then it might be misused.
Adoption: This means that the general adoption of the Worldcoin depends on the degree at which this would ultimately be in use. Lack of trust or understanding would take some time before getting people to get on board. Perhaps, the defining characteristics would be in the element of trust.
Regulation: The use of Worldcoin is like any other use of digital currency, which pretty much is going to invite some level of governmental scrutiny on its own. It could easily be exposed to various regulatory policies to be implemented by governments from different parts of the world, and this could restrict its usage.
Conclusion
Exciting and special, these hopes bring the concept of cryptocurrency to every single individual on earth. The digital currency WLD does have a special name in respect to a digital identity called World ID, which hopes to bring all borders into global financial networking.
While it indeed has had its fair share of controversies on its adoption and majorly on issues related to privacy, it indeed holds immense promise in furthering financial inclusion and changing the world’s financial system. Only time will tell whether Worldcoin will live up to its grandiose promises or not.
